This report examines the legal and institutional frameworks involved in the environmental licensing of hydropower developments. It presents case studies, assesses the transaction costs of the licensing processes, and draws comparisons across countries.

The report intends to contribute to the ongoing debate in Brazil, where environmental licensing is perceived as a major obstacle for the expansion of the country’s electricity generation capacity. This is a highly relevant issue as it expected that by 2015 hydropower will provide around 75% of Brazil's electricity and much of the unexplored hydropower potential is in the environmentally sensitive Amazon region.